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Hope rings eternal 

When it comes to foreclosures, things seem more cheery on the phone than on the ground

click to enlarge Foreclosures through September indicated with red dots. For a full map, click here. - COURTESY EL PASO COUNTY ASSESSOR'S OFFIC
  • Courtesy El Paso County assessor's offic
  • Foreclosures through September indicated with red dots. For a full map, click here.

You've got a couple choices if you're looking for a dose of sunshine during this mortgage crisis.

Dialing 888/995-HOPE gets you to the Homeownership Preservation Foundation, a Minneapolis-based nonprofit. Though high call volume can make it hard to speak to a living person, the foundation offers soothing classical music and thoughtful recorded messages to those on hold.

"We appreciate your patience," a woman's voice intones only moments after the wait begins on a Monday morning. She returns seconds later: "Making this call is an important first step."

You can also dial 877/601-HOPE for the Colorado Foreclosure Hotline. Callers to this number enter their ZIP codes for truly localized attention. In the Pikes Peak region, you're promised a return call within 48 hours by a volunteer who will "work with you to save your home."

So much hope available, and toll-free. You might think the country has this mortgage problem pretty well whipped.

Gloria Mendoza, a local broker associate with RE/MAX Properties, resists that conclusion as she struggles to remember the combination of numerals preceding the "HOPE" in the Colorado hotline's number.

"I'm convinced it's not as hopeful," she says.

What if ... ?

Mendoza, who started the Colorado Springs chapter of the National Association of Hispanic Real Estate Professionals, says she knows people who are still too embarrassed about their financial troubles to seek help avoiding foreclosure.

Then there are people whom the system simply doesn't seem equipped to help.

She mentions a Hispanic family that has made payments for three years on a $165,000 house without making even a dent into the principal. Now the house is worth only $145,000, their mortgage is about to reset to a higher interest rate, and the family is facing a strong financial argument to simply abandon ship.

Mendoza says she recently called local banks, hoping the federal bailout money injected into the lending system had lubricated things enough to give this family a chance of working out a deal.

"After calling three lenders, I got really bummed out," she says.

She pauses for a moment to think about how much worse things could become if job losses mount and existing mortgages continue resetting.

"What if [the economy] just keeps going down?" she asks.

Breaking records

A Dec. 14 segment from 60 Minutes asks a similar question, and predicts a new round of defaults this year that will see "Alt-A" and "option ARM" mortgages replace "sub-primes" as the star villains leading the country to economic ruin.

But not everyone is convinced those particular types of loans will wreak havoc locally. Thomas Mowle, the state official who administers foreclosures in El Paso County, believes the worst might be behind us.

El Paso County has already charted record-breaking foreclosure numbers for 2008, with 4,174 filed through November and close to 4,500 expected for the year. The recent trend, Mowle says, has been more to the north and eastern parts of the city, and also in the Falcon area. Through September, El Paso County had seen 32 percent more foreclosure filings than in the same period in 2007, the biggest increase in any of the state's 12 metropolitan counties, according to a Colorado Division of Housing report. (Even with the increase, El Paso ranked only 13th out of all Colorado counties in its foreclosure rate, with about one out of 141 households.)

For 2009, Mowle predicts about 4,000 foreclosures. While that would still rank second to 2008 in the county's foreclosure history, it'd be an improvement.

As the situation levels out, more investors seem to be looking for bargains. Barney Alvarado, who was buying foreclosed homes as the El Paso County rush got started late last year, says he's seen some fresh faces at auctions in the past month or two.

He seems almost amazed at some of the deals that are out there: "There are some cheap, cheap houses."

Following the script

If the market really has bottomed out, buying houses right now would be a safe bet. With dropping interest rates, there's a strong argument that it's a good time to buy.

Many people hope that's the case. Start with the Homeownership Preservation Foundation, which offers its toll-free number to help people avoid foreclosure.

It probably shouldn't be surprising that the foundation has close ties to many of the corporate giants that got black eyes as this crisis developed. Fannie Mae, which lost billions before securing federal backing in September, gave the Homeownership Preservation Foundation a whopping $2.75 million in 2007, while Freddie Mac, Washington Mutual, Countrywide Financial and Citigroup each chipped in $100,000 or more.

Jonathan, who works for the Homeownership Preservation Foundation at a Spokane, Wash., call center, shrugs off questions about these donors and concern about whether problems have really been fixed.

He reads from a script when asked about the services offered by the Foundation, then summarizes in a perfect tone of hopefulness.

"We just offer solutions," he says, "to try and help you."

lane@csindy.com

  • Gloria Mendoza doesn't feel hopeful about the bailouts helping local homeowners.

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